EXHIBIT 10.8.4
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made as of the 2nd day of February, 1998 by
and between AMERICAN CARD TECHNOLOGY, INC., a Delaware corporation, with
a business office at 0000 Xxxxxxx Xxxx Xxxx - Xxxxx 000, Xxxxxxxx,
Xxxxxxx 00000 (hereinafter called the "Corporation"), and XXXXX XXXXXXXX
(hereinafter called the "Optionee").
The Corporation has adopted a 1996 Nonemployee Directors' Stock
Option Plan (the "Plan") to be used to award options to purchase shares
of its common stock to those directors of the Corporation who are not
employees of the Corporation or any of its subsidiaries. The Board of
Directors of the Corporation (the "Board") or a special committee of the
Board (the "Committee") has authorized the awarding of an option under
the Plan to the Optionee. Wherever the context so requires, the
"Corporation" shall be deemed to refer to any or all of the
Corporation's subsidiaries.
NOW, THEREFORE, in consideration of the premises contained herein, it is
hereby agreed as follows:
1. The Corporation hereby grants to the Optionee as of the date of this
Agreement the right and option to purchase (hereinafter called the "Option") all
or any part of an aggregate of 2,500 shares of the Corporation's common stock,
with a par value of $.001 per share (hereinafter called the "Common Stock"), on
the terms and conditions herein set forth.
2. The Option shall not constitute an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
3. The Optionee's right to exercise the Option shall be subject to the
following terms and conditions:
(a) OPTION PRICE. The price per share with respect to the Option
shall be Twelve and 00/100 Dollars ($12.00) (the "Option Price").
(b) EXERCISE OF OPTION. Subject to the terms and conditions
set forth herein, this Option shall be exercisable, in whole or in part,
at any time and from time to time, during that period commencing on the
date hereof and ending at 5:00 p.m., eastern standard time, February 1,
2008 (after which date this Option shall lapse with respect to any
shares of Common Stock not theretofore purchased).
(c) NOTICE OF EXERCISE; PAYMENT; SHAREHOLDERS' RIGHTS. The
Optionee shall exercise the Option by giving a written notice of
exercise, in the form attached to this Agreement as EXHIBIT A, to the
President of the Corporation, indicating the number of shares of Common
Stock to be purchased, and tendering payment in full (i) by cash or
certified or bank check, (ii) by delivery of shares of Common Stock then
owned by the Optionee with a fair market value at the time of exercise
equal to the Option Price, or (iii) by a combination of (i) and (ii).
No shares shall be issued or delivered until full payment therefor has
been made. The Optionee shall have none of the rights of a shareholder,
in respect of the Common Stock, except with respect to shares actually
issued to the Optionee.
(d) NON-TRANSFERABILITY OF OPTION. The Option shall not be
transferable other than by will or by the laws of descent and
distribution. During the Optionee's lifetime, only the Optionee may
exercise the Option.
(e) TERMINATION OF SERVICE AS A DIRECTOR. If the Optionee
shall cease to be a director of the Corporation for whatever reason
other than by death or disability, the Optionee shall have the right to
exercise the Option (except to the extent the Option shall have been
exercised or shall have expired) until the later to occur of (i) ninety
(90) days after the date of termination of service as a director, or
(ii) six (6) months and ten (10) days after the Optionee's last purchase
or sale of shares of Common Stock prior to the termination of Optionee's
service as a director. Any portion of the Option not exercised within
said period shall lapse. Shares of Common Stock issued upon such
exercise shall be subject to the Corporation's right to repurchase the
Common Stock as provided in Section 5 hereof.
(f) DEATH OR DISABILITY OF OPTIONEE. If the Optionee shall
die or become disabled within the meaning of Section 22(e)(3) of the
Code while still serving as a director or prior to the termination of
the Option pursuant to Section 3(e) hereof, the Optionee or the executor
or administrator of the estate of the Optionee, or the person or persons
to whom the Option shall have been validly transferred by the executor
or administrator pursuant to will or the laws of descent and
distribution, shall have the right within one year from the date of the
Optionee's death or disability to exercise the Option, except to the
extent the Option shall have been exercised or shall have expired. Any
portion of the Option not exercised within said one-year period shall
lapse. Shares of Common Stock issued upon such exercise shall be
subject to the Corporation's right to repurchase the Common Stock as
provided in Section 5 hereof.
4. Shares of Common Stock issued upon the exercise of any portion
of the Option granted under this Agreement shall be subject to the
following terms and conditions:
(a) TRANSFERABILITY. The Common Stock shall be transferable
only in compliance with this Section 4 and only pursuant to an effective
registration or exemption from registration under the Securities Act of
1933, as amended. All transfers, whether or not permitted by this
section, shall be subject to all of the provisions of this Agreement.
Stock certificates representing shares of Common Stock shall bear a
legend in substantially the following form:
The shares of the Corporation's common stock represented by
this certificate have not been registered under the Securities
Act of 1933, as amended, and may not be transferred except
pursuant to an effective registration, or exemption from
registration, under said Act. In addition, such shares are
subject to a right of repurchase by the Corporation.
(b) REPURCHASE OF COMMON STOCK BY THE CORPORATION FOLLOWING
TERMINATION OF SERVICE AS A DIRECTOR OR BY EXERCISE OF RIGHT OF FIRST
REFUSAL. The Corporation shall have a right to repurchase, at the
buy-back price set forth below, any or all of the Common Stock issued
upon the exercise of the Option. Such right shall arise if the Optionee
ceases to serve as a director of the Corporation for any reason, if the
Optionee becomes disabled, at the time of the Optionee's death, or if
the Optionee elects to dispose of any such shares of Common Stock by
sale, transfer or other disposition.
(i) REPURCHASE ON DEATH, DISABILITY, OR TERMINATION OF SERVICE
AS A DIRECTOR. In the event the Optionee dies, becomes disabled, or ceases
to serve as a director of the
Corporation for any reason, the Corporation shall, within thirty days
immediately following the date on which the Optionee's service as a
director terminates, give to the Optionee or the Optionee's legal
representative, as the case may be, a signed notice in writing, either
delivered by hand, or mailed by registered or certified mail, to the
Optionee's last known address: (1) stating that the Corporation has the
first right to purchase the Common Stock; (2) designating the number of
shares of the Common Stock that the Optionee or the Optionee's legal
representative must sell to the Corporation; (3) naming the buy-back
price per share in cash at which the Optionee or the Optionee's legal
representative is obligated to sell such shares, as determined herein;
and (4) stating whether the Corporation elects to exercise its right to
repurchase the Common Stock.
(ii) REPURCHASE ON ATTEMPTED TRANSFER. In the event the Optionee
elects to dispose of any of the Common Stock, the Optionee shall give to
the President of the Corporation a signed notice in writing, either
delivered by hand, or mailed by registered or certified mail, to the
Corporation's principal office: (1) designating the number of shares of
the Common Stock to be disposed of; (2) stating the specific manner in
which the Optionee proposes to dispose of such shares if they are not
purchased by the Corporation pursuant to this Agreement; (3) specifying the
names and addresses of the persons to whom the Optionee desires to dispose
of such shares to the extent not so purchased by the Corporation;
(4) offering to sell such shares to the Corporation; (5) naming the price
per share in cash at which the Optionee is willing to sell such shares to
the Corporation, which price shall not be greater than the buy-back price
as determined herein; and (6) designating the Optionee's mailing address.
The Corporation shall have a period of thirty days after the receipt of the
notice within which to accept the Optionee's offer as contained in the
Optionee's notice. Acceptance shall be by notice in writing to that effect
hand delivered or mailed to the Optionee prior to the expiration date of
said thirty-day period to the mailing address designated in the Optionee's
notice. If the Corporation declines to accept such offer, the Optionee
shall have a period of forty-five (45) days within which to dispose of such
shares of Common Stock. Such forty-five (45) day period shall commence on
the date of receipt of the Corporation's written rejection of such offer
or, if the Corporation does not reject such offer in writing, on the
expiration of the thirty-day period within which the Corporation may accept
such offer.
(iii) BUY-BACK. The buy-back price per share for purposes of
this Section 4(b) shall be:
(1) the price per share offered in a bona fide offer to
purchase, or
(2) in the absence of a bona fide offer to purchase, the
fair market value per share as determined by the Board or the
Committee, which amount shall not be less than the price per share at
which shares of Common Stock were last sold by the Corporation other
than pursuant to the Plan.
(c) PROCEDURE FOR REPURCHASE. If any shares of the Common Stock are
subject to repurchase as provided in Section 4(b) hereof, and the Corporation
shall have exercised its right to repurchase, the Optionee or the Optionee's
legal representative shall immediately deliver to the Corporation the
certificates for the shares. The certificates shall be voided, and the shares
of the Common Stock represented by the certificates shall be thereafter treated
on the books of the Corporation as treasury shares. A person required to
deliver a certificate for the Common Stock under this section shall be deemed
irrevocably to have authorized the voiding of such certificate and the treatment
of such Common Stock as
treasury shares (regardless whether the certificates are in fact
delivered) and irrevocably to have authorized the Board to terminate his
status as a shareholder in respect of such shares.
(d) PAYMENT FOR SHARES OF COMMON STOCK. The Corporation
shall have the right to pay the purchase price for any shares purchased
pursuant to this Section 4 over a one year period, in equal quarterly
installments without interest, or, in the case of a bona fide offer to
purchase, in the manner and over such period of time as provided for in
such offer.
(e) PRICE ADJUSTMENT. In all cases the buy-back price per
share shall be adjusted to reflect previous capital changes, if any, as
described in Section 8 hereof. No offer to purchase shall be deemed
"bona fide" unless made by a third party unrelated to the Corporation or
its shareholders with the intention that such purchase be an investment
in the Corporation and not with a view to distribution or resale, nor
shall any offer to purchase be deemed "bona fide" if made by a
competitor of the Corporation regardless of the offeror's intention.
5. In the event the Optionee dies, becomes disabled, or ceases to
serve as a director of the Corporation and the Optionee has accrued but
not exercised rights to purchase shares of Common Stock, the following
terms and conditions shall apply.
(a) REPURCHASE ON TERMINATION OF SERVICE, DISABILITY, OR
DEATH WITH RESPECT TO OPTIONS ACCRUED BUT NOT EXERCISED. Upon
termination of the Optionee's service as a director, or upon the
Optionee's death or disability giving the Optionee, or the Optionee's
legal representative, rights to exercise the Option under either Section
3(e) or 3(f)(ii) hereof, the Corporation shall, within thirty days
immediately following the date on which the Corporation learns of the
Optionee's death, disability, or the date on which the Optionee's
service as a director terminates, give to the Optionee or the Optionee's
legal representative, as the case may be, a signed notice in writing,
either delivered by hand, or mailed by registered or certified mail, to
the Optionee's last known address: (i) stating that the Corporation has
the first right to purchase the Common Stock subject to the Option; (ii)
designating the number of shares of the Common Stock which the Optionee
or the Optionee's legal representative has a right to purchase under the
Option and the option price per share under this Agreement; (iii) naming
the buy-back price per share in cash which the Optionee or the
Optionee's legal representative is obligated to sell the shares subject
to the Option, as determined herein; and (iv) stating whether the
Corporation will exercise its right to repurchase the Common Stock if
the Optionee or the Optionee's legal representative exercised the Option.
(b) SIMULTANEOUS EXERCISE OF OPTION AND REPURCHASE OF COMMON
STOCK. The Optionee or the Optionee's legal representative may exercise
the Option within the time period provided in Section 3(e) or Section
3(f)(ii) hereof, as the case may be, by giving the Corporation notice of
exercise of the Option under Section 3(c) hereof. However, such notice
need not be accompanied by tender of payment if the Corporation has
elected to exercise its right to repurchase. Upon receipt of the notice
of exercise from the Optionee or the Optionee's legal representative
within the applicable time period, the Corporation shall pay the
Optionee or the Optionee's legal representative for each share an amount
equal to the buy-back price per share less the option price per share.
If the Corporation does not exercise its right to repurchase under
Section 5(a) hereof, then this Section 5(b) shall be of no effect, and
the provisions for exercising the Option under Section 3(c) shall apply.
(c) COMBINING NOTICES. If the Optionee, or the Optionee's legal
representative, has both shares of Common Stock and a right to exercise the
Option as to additional shares of Common Stock,
then the Corporation may deliver one notice to the Optionee or the
Optionee's legal representative to satisfy the provisions of Section
4(b)(i) hereof and Section 5(a) hereof provided the information required
to be contained in each notice under such sections are contained in the
single notice.
6. Failure by the Corporation to exercise its rights to
repurchase the Common Stock upon termination of service as a director of
the Optionee shall not be a waiver of the Corporation's right to
repurchase on a subsequent sale, transfer or other disposition of Common
Stock.
7. Subject to the restrictions of this Agreement, the Optionee
shall have all the rights of a shareholder in respect of the Common
Stock issued hereunder, beginning with the date of issuance of the
Common Stock. The Common Stock shall be fully paid and non-assessable.
8. The number and Option Price of shares of Common Stock subject
to this Option may be adjusted or substituted as follows:
(a) In the event that a dividend shall be declared upon the
shares of Common Stock payable in shares of Common Stock, the number of
shares of Common Stock then subject to this Option shall be adjusted by
adding to each of such shares the number of shares which would be
distributable thereon if such shares had been outstanding on the date
fixed for determining the stockholders entitled to receive such stock
dividend. In the event that the outstanding shares of Common Stock
shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock
split-up, combination of shares, merger, or consolidation, then there
shall be substituted for each share of Common Stock subject to this
Option, the number and kind of shares of stock or other securities into
which each outstanding share of Common Stock shall be so changed or for
which each such share shall be exchanged; PROVIDED, HOWEVER, that in the
event that such change or exchange results from a merger or
consolidation, and in the judgment of the Committee such substitution
cannot be effected or would be inappropriate, or if the Corporation
shall sell all or substantially all of its assets, the Corporation shall
use reasonable efforts to effect some other adjustment of this Option
which the Committee, in its sole discretion, shall deem equitable. In
the event that there shall be any change, other than as specified above
in this Section 8(a), in the number or kind of outstanding shares of
Common Stock or of any stock or other securities into which such shares
of Common Stock shall have been changed or for which they shall have
been exchanged, then, if the Committee shall determine that such change
equitably requires an adjustment in the number or kind of shares then
subject to this Option, such adjustment shall be made by the Committee
and shall be effective and binding for all purposes of this Option. In
the case of any such substitution or adjustment as provided for in this
paragraph, the Option Price in this Option for each share covered hereby
prior to such substitution or adjustment will be the total option price
for all shares of stock or other securities which shall have been
substituted for each such share or to which such share shall have been
adjusted pursuant to this Section 8. No adjustment or substitution
provided for in this Section 8(a) shall require the Corporation to sell
a fractional share; and the total substitution or adjustment with
respect to this Option shall be limited accordingly.
(b) Any of the foregoing adjustments or substitutions in the
shares subject to the Option shall not limit applicability of the
restrictions hereunder and such restrictions shall automatically apply
to all Common Stock or other securities issued by the Corporation and at
any time held by the Optionee by virtue of having exercised the Option.
9. The Optionee represents and agrees to represent and agree at the time
of the exercise of the Option that any and all Common Stock purchased pursuant
to the exercise of the Option will be purchased for investment and not with a
view to the distribution or resale thereof, and that the Common Stock will not
be sold except in accordance with the restrictions or limitations set forth in
this Agreement or as may be imposed by law.
10. The Corporation shall at all times during the term of the Option
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement.
11. If the Corporation registers any of its shares of common stock
under the Securities Act of 1933, as amended (the "Act"), the provisions
of Section 4 and Section 5 hereof shall terminate on the day the
registration statement becomes effective. The Common Stock issued upon
exercise of the Option shall thereupon be free of any restriction
imposed hereby, except for the restriction requiring transfer pursuant
to the Act if such registration does not include the Common Stock, and
neither the Corporation nor the Optionee shall have any further rights
or obligations under Section 4 or Section 5 hereof, except the
Corporation's obligation to complete payments, under Section 4(b)
hereof, for the Common Stock previously repurchased.
12. This Agreement shall be interpreted according to the laws of
the State of Georgia.
13. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association, and
judgment upon the award rendered may be entered in any Court having
jurisdiction thereof.
14. This Agreement and the Plan which is hereby incorporated by
reference herein contain the entire agreement of the parties with
respect to the Common Stock. All prior agreements and understandings
are merged herein. No amendment or modification hereof shall be binding
unless in writing and signed by the party against whom enforcement is
sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year as first above written.
Seal AMERICAN CARD TECHNOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxxx, Xx.
---------------------------------
Its President
Attest:
/s/ Xxxxxxx X. Xxxx, Xx. /s/ Xxxxx Xxxxxxxx
------------------------------- ---------------------------------
Secretary Xxxxx Xxxxxxxx
EXHIBIT A
______________________________________________________
Address of Person Exercising Option
_____________________
Date
American Card Technology, Inc.
0000 Xxxxxxx Xxxx Xxxx - Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Dear Sirs:
I hereby elect to exercise the Option to purchase shares of Common
Stock of the Corporation awarded to me on February 2, 1998.
A. The number of shares being purchased: ________ shares at $12.00 per
share.
B. I desire to follow Procedure 1 or Procedure 2, as indicated below:
[CHECK EITHER PROCEDURE 1 OR PROCEDURE 2 AND FILL IN BLANKS UNDER THAT
PROCEDURE ONLY].
_____ PROCEDURE 1: A certified or bank cashier's check payable to
the order of the Corporation in the amount of $_______________
[insert the full purchase price of the shares being purchased]
is attached.
The certificate or certificates should be mailed or
delivered to:
_____________________________________________
_____________________________________________
_____________________________________________
_____ PROCEDURE 2: Payment of $_______________, being the full
purchase price of the shares being purchased, is to be made by
certified or bank cashier's check payable to the order of the
Corporation at the office of the Corporation, 0000 Xxxxxxx Xxxx
Xxxx - Xxxxx 000, Xxxxxxxx, Xxxxxxx, against delivery of a
certificate or certificates representing such shares to me or my
representative, on the ______________ [here insert Fifth, Sixth,
Seventh, Eight, Ninth or Tenth] business day from the date of
this notice is received by the Corporation.
Please advise me of the exact date and time when payment and
delivery will take place.
I will [check one]
_____ appear personally to make payment and accept
delivery
_____ be represented by:
_____________________________________________
_____________________________________________
_____________________________________________
[here insert name and address of bank or other
representative authorized to act for you].
C. The certificate or certificates for the shares being purchased should
be registered and the name and address to be shown on the Corporation's stock
records should be as follows:
_____________________________________________
_____________________________________________
_____________________________________________
D. I represent and agree that the shares as to which I am hereby
exercising an option are being purchased for investment and not with a view to
the distribution or resale thereof, and the Common Stock will not be sold except
in accordance with the restrictions or limitations set forth in the Stock Option
Agreement or as may be imposed by law.
Sincerely yours,
______________________________
Xxxxx Xxxxxxxx
AMENDMENT TO 1996 NONEMPLOYEE DIRECTORS'
STOCK OPTION PLAN
Adopted by the following resolution of the Board of Directors dated as of
February 2, 1998:
RESOLVED: that the Board of Directors, acting as the committee to
administer the American Card Technology, Inc. 1996 Nonemployee Directors'
Stock Option Plan (the "Directors' Plan"), amend the Directors' Plan as
follows:
(a) By deleting Paragraph 6(a) in its entirety and substituting the
following in lieu thereof:
"(a) an Option to purchase 2,500 shares of Common Stock will be
granted to each Participant on February 2, 1998
(b) By deleting the references to "1997" in Paragraph 6(c) and
substituting "1999" in lieu therefor.
(c) By deleting the first sentence of Paragraph 7(a) and substituting
the following in lieu therefor:
"The exercise price of each Director's Option shall be at least
one hundred percent (100%) of the fair market value of the shares
subject to such Option on the date of grant."
and the Directors' Plan is hereby so amended.
